Government of IndiaMinistry of FinanceDepartment of Revenue Tax Research Unit*****Gautam Bhattacharya Joint Secretary (TRU-II) Tel; 23093027Fax: 23093037e-mail: email@example.com
D.O. F. No.334/13/2009-TRU
New Delhi, 6
July, 2009Dear Chief Commissioner/ Director General/Commissioner, The Finance Minister has introduced the Finance (No. 2) Bill, 2009 in theLok Sabha on the 6
of July, 2009. Clause 112 of the Finance (No 2) Bill, 2009covers all the changes relating to Chapter V of Finance Act, 1994. Changes are alsobeing proposed in the provisions of the,-
CENVAT Credit Rules, 2004;
Works Contract (Composition Scheme for Payment of Service Tax)Rules, 2007; and
Taxation of Services (Provided from Outside India and Received inIndia) Rules, 2006.Notification Nos. 16/2009-ST to 23/2009-ST and 16/2009-CE (NT) all dated 7
July, 2009 refer. Details of the changes are explained in the Explanatory Notes. The salient features of the changes are discussed hereinafter.2.
New Services included in the list of Taxable Services
The following new services are proposed to be included in the list of taxableservices. These services would get covered under the list of taxable services from adate to be notified after the enactment of Finance (No. 2) Bill, 2009.2.1 Transport of Goods through Rail: Presently, transportation of goods incontainers by rail, by other than Government railways is taxable under section65(105)(zzzp) since 2006. It is now proposed to impose service tax on goodstransported by railways including Government railways, whether in containers orotherwise. Suitable abatement and exemption to specified goods would be providedthrough issuance of notification at the appropriate time.2.2 Transport of Coastal Goods; and Goods transported through Inland water:Coastal goods (as defined under the Customs Act) and transport of goods throughNational Waterways, and inland waters are proposed to be brought under tax net.Suitable abatement and exemption to specified goods would be provided throughissuance of notification at the appropriate time.2.3 Legal Consultancy Service: As in the case of management consultancy orengineering consultancy service, any consultancy, advice or technical assistanceprovided in any discipline of law is proposed to be subjected to service tax.However, the tax would be limited to services provided by a business entity toanother business entity. It has been defined that a business entity includes firms,associates, enterprises, companies etc. but does not include an individual. Thus,services provided by an individual advocate either to an individual or even to abusiness entity would be outside the scope of the taxable service. Similarly, theservices provided by a corporate legal firm to an individual would also be outside thepurview of taxable service. Any service of appearance before any court of law or anystatutory authority would also be kept outside this levy.